Advances in financial and consumer technology have changed the way we consume goods and services. New, digital business models have not just pushed out existing ones (Spotify killed the CD), they have also created markets that had practically not existed before (Airbnb opened many doors that otherwise would have stayed shut). By creating new markets, such businesses have given consumers access to goods and services that may improve their lives significantly – but they have also exposed them to novel risks. From a regulatory perspective this raises a fundamental dilemma: risks call for regulation, yet regulation might kill the business model and thereby cut off consumers from the goods and services offered. In our chapter ‘When the Lights Go Out – Remote-Lockout-Technology in Sustainable Pay-As-You-Go-Products’ in Sustainable Digital Finance (edited by Ingrid-Gabriela Hoven, Soh Young In and Thomas Puschmann), Professor Sebastian Omlor and I analyse this dilemma, looking at a case where the digital and sustainable transformation of our economies intersect: remote lockouts in PAYGo-products, especially PAYGo-solar.
PAYGo-products, short for Pay-As-You-Go-products, are essentially products that, as the name suggests, you pay for while you use them. Instead of buying a car, for example, I can use a car-sharing service and pay for the number of minutes I drive for. In today’s world, many different goods and services are offered under PAYGo-contracts. Our chapter focuses on sustainable PAYGo-products. Most importantly, that includes PAYGo-solar.
PAYGo-solar is a new business model that has become popular around the world, especially in East Africa. Under PAYGo-solar contracts, customers receive a solar panel, but do not pay for the panel itself but instead for the energy they consume using the panel, within a set period of time ranging from months to only a few days. In 2024 alone 3.5 million off-grid solar panels were distributed under PAYGo-contracts. Often, PAYGo-solar will be bundled with other products that make use of the energy source, such as fans or fridges, but also TVs.
However, PAYGo-solar comes with strings attached. Because the individual fee is calculated only after the energy has been consumed, PAYGo-solar is provided on credit. And where there is credit, there is default. Providers want to limit the risk of default; and they have found a new way to do so: Remote Lockout Technology (RLT).
RLT is essentially a kill-switch. Providers can, if a customer defaults on their payments, simply turn off the solar panel. Customers lose access to the energy source. Depending on what they are using the energy for and whether they have access to alternative energy sources, this can have dire consequences. In parts of Africa, for example, PAYGo-solar is bundled with solar-powered water pumps. Losing access to the solar panel, therefore, can mean losing access to drinking water or water used for irrigation of smallholder crops. While this provides a stark incentive not to miss payments (which is why providers like RLT, of course), it may also risk the lives and livelihoods of customers.
PAYGo-products implementing RLT, therefore, come at a risk: a risk that might call for legal restrictions. Yet, providers will argue that without RLT the risk of default is simply too great. This is where the dilemma lies: allowing the use of RLT might pose significant risks to customers – yet without RLT they might lose access to PAYGo-solar altogether. With PAYGo-solar, losing access is not just an issue for the individual customer, it is also a public policy issue. PAYGo-solar helps individuals with limited funds reduce their carbon footprint. From a policy perspective there is a strong interest to make this work.
We approach this dilemma in two ways. First, we analyse, from a bird’s-eye view, what limits private law might already be imposing on the use of RLT. We focus on two issues. One, many legal systems have rules that protect the possessor of a thing against unpeaceful infringements of their possession even where the person committing the infringement is the rightful owner. This principle, we show, might prevent providers from using RLT. Yet, there is great ambiguity on whether possessory remedies really do apply to ‘digital infringements’ such as RLT. Two, many legal systems will impose limits on what types of property creditors can have a court seize (by attachment) to satisfy a debt owed to them. This principle, equally, could be applied to RLT, which is essentially a kind of private enforcement mechanism bypassing procedural rules. But again, there is great ambiguity concerning whether and how this may work.
In a second perspective, we look at regulatory approaches to RLT. We address some of the policy issues concerning RLT and PAYGo-solar that do not already underpin the private law analysis. And we show how states in the US have dealt with the problem of similar kill-switches being used in cars sold on credit.
Based on our findings, we recommend that RLT in PAYGo-solar products should be limited, but not prohibited by statute, to provide some protection to customers, without cutting off their access. There is a variety of regulatory instruments available to legislators, ranging from imposing specific contractual duties, to statutory standards for injunctions issued against PAYGo-providers using RLT, to linking defaults in PAYGo-solar to government subsidies. Legislators in those countries where PAYGo-solar has become a popular business model should make use of those options before a wave of defaults combined with ambiguous legal rules put both individuals and the energy transition at risk.
Keywords: Digital Finance, Sustainable Finance, Financial Regulation, Private Law and Digitalisation
AUTHOR INFORMATION
Benedikt Bartylla is a PhD candidate and research assistant at the Institute for the Law and Regulation of Digitization (IRDi), University of Marburg, Germany. Benedikt was a Visiting Scholar with NUS Faculty of Law in September-October 2025.